Managerial Accounting Final 8,10,13

The budgeting process begins with the preparation of the ______ budget.

sales

Which of the following types of decisions involves deciding whether to accept or reject an order that is outside the scope of normal sales?

special order

Costs that have been incurred and cannot be eliminated regardless of the alternative chosen are ________.

sunk costs

The standard quantity allowed is _______.

the amount of an input that should have been used to complete the actual output for the period

The standard hours allowed is ________.

the direct labor-hours that should have been used to complete the actual output for the period

When computing variable manufacturing overhead variances, the standard rate represents the ________.

variable portion of the predetermined overhead rate

The involvement by a company in more than one of the activities in the entire value chain from development through production, distribution, sales, and after-sales service is called ________.

vertical integration

When a company does not have enough capacity to produce all of the products and sales volume demanded by their customers, this leads to ________.

volume trade-off decisions

What of the following forms the basis for a financial advantage when making a business decision?

whether the differential benefits exceed the differential costs

Assume that direct labor-hours are used as the overhead allocation base. If the direct labor efficiency variance is unfavorable, the variable overhead efficiency variance ________.

will be unfavorable

The potential benefit that is given up when one alternative is selected over another is called ________.

opportunity cost

Most companies compute the materials price variance when raw materials are _______.

received from suppliers and transported to raw materials inventory.

High Roller Incorporated is trying to decide whether to buy a private jet or to lease one. The finder's fee is incurred only if the private jet is bought. The finder's fee is what type of cost for this decision?

relevant cost

Which of the following explains why operating budgets generally span a period of one year?

Companies choose a span of one year to correspond to their fiscal years

Which of the following statements about using different approaches to analyze alternatives is NOT true?

Considering only the relevant costs gives results a different answer than that obtained when all costs are considered.

The labor rate variance measures the difference between the actual hourly rate and the standard hourly rate, multiplied by the standard hours allowed for the actual output.

FALSE

When a company has a production constraint, the product with the lowest contribution margin per unit of the constrained resource should usually be given highest priority.

FALSE

Which of the following is not a benefit of self-imposed budgets?

Lower-level managers are encouraged to create budgetary slack since they are more knowledgeable of day-to-day operations

When the materials price variance is recorded at the time of purchase, raw materials are recorded as inventory at standard cost.

TRUE

Which of the following is not one of the reasons that organizations use budgets?

The budgeting process enables managers to uncover bottlenecks as they occur.

The standard quantity per unit defines the ________

amount of direct materials that should be used for each unit of finished product including an allowance for normal inefficiencies, such as scrap and spoilage

All of the following are relevant to the sell or process further decision except _______.

joint costs incurred before the split-off point

A flexible budget performance report for variable manufacturing costs shows _______.

both the activity variances and the spending variances

In a budgeted income statement, _________ is subtracted from sales to arrive at gross margin.

cost of goods sold